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travel industry, us travel industry, British travel industry
Associated Press

Is the Travel Industry Struggling, or Just Shifting Gears?

September 17, 2008 05:59 AM
by Sarah Amandolare
Economic struggles have led to the closures of many travel agencies and tour companies in the United States and abroad, however these failures have been tempered with successes.

Gas Prices and International Travel

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In August 2008, British airline Zoom, which offered flights to Canada, shut down after fuel prices and a lackluster economic climate led to the seizure of one of the company’s planes. The event had a “domino effect,” as nervous creditors backed out, ultimately causing Zoom to fold, according to the BBC.

On Sept. 10, 2008, the BBC reported that Cheshire, England-based tour company Seguro Holidays was experiencing financial difficulties. Unable to keep up with high fuel prices, Seguro’s primary carrier Futura had “launched insolvency proceedings,” forcing travelers already abroad to wait for alternative flights. The collapse of Futura was called “totally unexpected” by those involved.

The UK's third largest tour operator XL also collapsed in mid-September, leaving 85,000 travelers stranded abroad waiting for flights home. Civil Aviation Authority director of consumer protection Richard Jackson said all customers would "be able to return from their holidays, and as close to their planned flight times as possible." Jackson called the incident "a massive logistical exercise."
 
Conversely, earlier in August 2008, U.K. newspaper The Guardian reported that the “positive outlook for travel groups” had contributed to a modest increase in the FTSE (Financial Times Share Exchange), particularly the success of travel companies Thomas Cook and TUI.

Furthermore, travel industry publication Travel Mole reported that more people were turning to live travel agents when planning vacations, rather than booking online. The cause was not related to the economic downturn, however; travelers said they had grown weary of navigating the world of online travel booking.

Despite the economy, and regardless of whether airlines and tour companies close, it seems that people will always find a way to travel. According to an April 2008 article in The New York Times, Mona Hamouly of American Express Travel credited travelers for “really being more savvy and resourceful and taking advantage of all the discounts and offers available to them.”

Related Topic: Retirees losing travel enthusiasm?

Citing an AARP study in July 2008, USA Today reported that many older Americans who’d planned to venture around the world in their retirement years had been forced to “downsize their dreams of travel” because of soaring fuel and health care costs. Even wealthier retirees were scaling back travel plans.

In February 2008, Fox Business focused on retirees’ impact on the travel industry, citing surveys showing that retiree travelers tended to “take longer trips.” The demographic also displayed a greater concern for the environment, and more willingness to volunteer on vacation.

Rochelle Lieberman of Michigan-based Gateway Travel said retirees were traveling far and wide. “I guess they just decided that this is their time,” she said.
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